SM - EXAM 1 QUESTIONS AND
ANSWERS 100% PASS 2026/2027
Which of the following statements is false?
Answers:
A dynamic capability is the ability to modify, deepen, or reconfigure the company's existing
resources and capabilities in response to changes in the environment or market.
A company's internal strengths should always serve as the basis for its strategy.
Managers must look toward correcting competitive weaknesses that make the company
vulnerable, dampen profitability, or disqualify it from pursuing an attractive opportunity.
Managers need to keep close track of how cost effectively the company can deliver value to
customers relative to its competitors.
Resources are harder to categorize than capabilities and more challenging to search for as a
result. - ANS Resources are harder to categorize than capabilities and more challenging to
search for as a result.
An example of a potential weakness or competitive deficiency is
@2026 ALLRIGHTS RESERVED 1
,Answers:
a rival developing unique resources and capabilities that require a high level of capital
investment.
the growing bargaining power of customers or suppliers.
lack of attention to customer needs.
restrictive foreign trade policies or tight credit conditions.
changes in technology-particularly disruptive technology. - ANS lack of attention to customer
needs.
The primary role of a functional strategy is to:
describe the mission and strategic intent of each key functional piece of the business.
create compatible degrees of strategic intent among a company's different business functions.
unify the company's various operating-level strategies.
determine how to support particular activities in ways that support the overall business strategy
and competitive approach.
@2026 ALLRIGHTS RESERVED 2
,assess what competitive capabilities to build in support of the overall company strategy and
what to do to unify the firm's skills, competencies, and resource strengths across all the various
key pieces of a company's business. - ANS determine how to support particular activities in
ways that support the overall business strategy and competitive approach.
Granville Transportation, a designer and manufacturer of self-driving buses and streetcars, is
working on developing the next generation of electric vehicles. Granville has chosen to focus on
a narrow buyer segment of medium-sized cities with populations between 100,000 and
1,000,000, and is outcompeting rivals by manufacturing its vehicles at a lower cost via artificial
intelligence-guided robots. Which of the five basic strategic approaches has Granville
Transportation decided upon?
broad differentiation
focused differentiation
focused low-cost provider
low-cost provider
best-cost provider - ANS best-cost provider
A strategy that distinguishes a company from its rivals and provides a sustainable competitive
advantage
is a company's most reliable ticket to above-average profitability.
is based heavily upon the emergent elements of its strategy.
@2026 ALLRIGHTS RESERVED 3
, is a reliable indicator that the company has a profitable business model.
is logical because the strategies of rival companies are often predicated on strikingly different
business models.
is the best indicator that the company's strategy and business model are well matched and
properly synchronized. - ANS is a company's most reliable ticket to above-average
profitability.
Which of the following is not an element of a company's realized business strategy?
actions and approaches used in managing R&D, production, sales and marketing, finance, and
other key activities
actions to strengthen competitiveness via strategic alliances and collaborative partnerships
actions to capture emerging market opportunities and defend against external threats to the
company's business prospects
actions to enter new geographic or product markets
adhering to abandoned strategy elements - ANS adhering to abandoned strategy elements
A company's business model :
determines whether its strategy will be ethical or not.
@2026 ALLRIGHTS RESERVED 4
ANSWERS 100% PASS 2026/2027
Which of the following statements is false?
Answers:
A dynamic capability is the ability to modify, deepen, or reconfigure the company's existing
resources and capabilities in response to changes in the environment or market.
A company's internal strengths should always serve as the basis for its strategy.
Managers must look toward correcting competitive weaknesses that make the company
vulnerable, dampen profitability, or disqualify it from pursuing an attractive opportunity.
Managers need to keep close track of how cost effectively the company can deliver value to
customers relative to its competitors.
Resources are harder to categorize than capabilities and more challenging to search for as a
result. - ANS Resources are harder to categorize than capabilities and more challenging to
search for as a result.
An example of a potential weakness or competitive deficiency is
@2026 ALLRIGHTS RESERVED 1
,Answers:
a rival developing unique resources and capabilities that require a high level of capital
investment.
the growing bargaining power of customers or suppliers.
lack of attention to customer needs.
restrictive foreign trade policies or tight credit conditions.
changes in technology-particularly disruptive technology. - ANS lack of attention to customer
needs.
The primary role of a functional strategy is to:
describe the mission and strategic intent of each key functional piece of the business.
create compatible degrees of strategic intent among a company's different business functions.
unify the company's various operating-level strategies.
determine how to support particular activities in ways that support the overall business strategy
and competitive approach.
@2026 ALLRIGHTS RESERVED 2
,assess what competitive capabilities to build in support of the overall company strategy and
what to do to unify the firm's skills, competencies, and resource strengths across all the various
key pieces of a company's business. - ANS determine how to support particular activities in
ways that support the overall business strategy and competitive approach.
Granville Transportation, a designer and manufacturer of self-driving buses and streetcars, is
working on developing the next generation of electric vehicles. Granville has chosen to focus on
a narrow buyer segment of medium-sized cities with populations between 100,000 and
1,000,000, and is outcompeting rivals by manufacturing its vehicles at a lower cost via artificial
intelligence-guided robots. Which of the five basic strategic approaches has Granville
Transportation decided upon?
broad differentiation
focused differentiation
focused low-cost provider
low-cost provider
best-cost provider - ANS best-cost provider
A strategy that distinguishes a company from its rivals and provides a sustainable competitive
advantage
is a company's most reliable ticket to above-average profitability.
is based heavily upon the emergent elements of its strategy.
@2026 ALLRIGHTS RESERVED 3
, is a reliable indicator that the company has a profitable business model.
is logical because the strategies of rival companies are often predicated on strikingly different
business models.
is the best indicator that the company's strategy and business model are well matched and
properly synchronized. - ANS is a company's most reliable ticket to above-average
profitability.
Which of the following is not an element of a company's realized business strategy?
actions and approaches used in managing R&D, production, sales and marketing, finance, and
other key activities
actions to strengthen competitiveness via strategic alliances and collaborative partnerships
actions to capture emerging market opportunities and defend against external threats to the
company's business prospects
actions to enter new geographic or product markets
adhering to abandoned strategy elements - ANS adhering to abandoned strategy elements
A company's business model :
determines whether its strategy will be ethical or not.
@2026 ALLRIGHTS RESERVED 4
